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All cash receipts and cash payments are recorded in Cash book. The cash book is a book of original entry or prime entry since the transactions are recorded for the first time in it from the source documents. The cash book is a ledger in the sense that it is designed in the form of a Cash account and records cash receipts on the debit side and cash payments on the credit side. Thus, the cash book is both a journal and a ledger. Cash book will always show a debit balance, as cash payments can never exceed the cash available.

Cash Book

Receipt Dr. Payment Cr.

Cash from sale

Payment to creditors

Cash from debtors

Payment for expenses

Cash from other income sources

Payment for purchases

Cash for capital loan

Payment for fixed assets

Cash from capital

Advance payment

Cash Book can be of the Following Types:

  • Single column cash book
  • Cash book with discount column (double column cash book)
  • Cash book with bank and discount column (triple column cash book)
  • Petty cash book

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